February Corelogic – 2 years of price gains

From HousingWire:

CoreLogic: Home prices increase into second year

Home prices, including distressed sales, jumped 12.2% in February 2014 compared to a year prior, marking 24 months of consecutive year-over-year increases in home prices nationally, the latest CoreLogic report said.

Month-over-month it slightly increased by 0.8% in February compared to January.

And the same level of ferocity is seen at the state level.

Fourteen states showed double-digit growth year-over-year, in addition to 22 states posting at or within 10% of their price peaks.

Taking away distressed sales, home sales nationally grew 10.7% in February from a year ago and 0.9% month-over-month.

“As the spring home-buying season kicks off, house price appreciation continues to be strong,” said Mark Fleming, chief economist for CoreLogic. “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”

Last month CoreLogic introduced a new forecast metric that provides and advanced indication of trends in home prices. Home prices, including distressed sales, are estimated to increase 0.5% month-over-month from February to March.

In addition, home prices, including distressed sales, are expected to increase 10.5% year-over-year from March 2013 to March 2014.

“February marks two straight years of year-over-year gains in national prices across the United States,” said Anand Nallathambi, president and CEO of CoreLogic. “The consistent upward movement in home prices should ultimately prove to be an important stimulant for higher levels of sustained market activity and growth in the housing economy.”

This entry was posted in Economics, Housing Recovery, National Real Estate. Bookmark the permalink.

62 Responses to February Corelogic – 2 years of price gains

  1. grim says:

    NY Metro has it’s best year over year performance yet.

    YOY – Including Distressed – Up 9.5%
    YOY – Excluding Distressed – Up 9.9%

  2. grim says:

    NJ Statewide also posts it’s best month yet

    YOY – Including Distressed – Up 7.3%
    YOY – Excluding Distressed – Up 7.4%

  3. yome says:

    With all this good numbers, we are still 20% off peak according to core logic. Look at the graph

    http://blogs.marketwatch.com/capitolreport/2014/04/01/four-states-hit-record-highs-for-home-prices/

  4. grim says:

    23.3% below 2006 peaks if you include distressed
    19.7% below 2006 peaks if you exclude distressed

  5. The Original NJ ExPat says:

    This is a perfect comment by chifi from late yesterday:

    chicagofinance says:
    April 1, 2014 at 6:05 pm
    BTW…..as a matter of course….it shows an utter lack of discretion and belies the kind of thoughtfulness that is usually required for students to achieve something of that stature. The Ivy’s are all so different….so almost by definition, the achievement in itself implicitly proves the corruption of the process.

    chicagofinance says:
    April 1, 2014 at 5:56 pm
    Did you see the story about the kid from Long Island that received acceptances from all eight Ivys? The second I heard it I thought….I bet…and my most cynical impulses were justified……

  6. Comrade Nom Deplume, Guardian of the Realm says:

    [5] expat,

    My first, and cynical, reaction was also proved correct. In fact, when I mentioned the story to my wife, the first thing she said was “Black?”

    I have no doubt he deserves to be at an Ivy. Fortunately, he can only take up one spot. And lets hope that spot isn’t wasted.

  7. Comrade Nom Deplume, Guardian of the Realm says:

    So my long term project is to track down her Cherokee heritage. As long as I can tie her to an ancestor on what is called the Dawes Roll, she gets federal recognition as Cherokee. And so do our kids.

    Back to the salt mine.

  8. The Original NJ ExPat says:

    [7] Nom – As an alternate, maybe you can see if she’s related to Elisabeth Warren?

  9. The Original NJ ExPat says:

    LOL! My 12 year old has been going to a free “STEM” course at MIT on Sunday afternoons. I just looked up their page and laughed out loud! Doesn’t look anything like the students in my daughter’s course (one mother drives her daughter up from Connecticut to attend, if that gives you a hint as to the ethnic makeup of the class) and then I laughed even louder when I noticed that to the right you can see an Asian literally almost pushed out of the picture.

    http://web.mit.edu/stem/STEM_Home.html

  10. clotluva says:

    “… price increases should moderate over the next year as home equity releases pent-up supply.”

    “A+” on coming up with a new way to say, “Underwater borrowers will refuse to sell at a price that doesn’t leave them whole.”

    Also, Grim, do you care to add any color commentary on the YOY price increases? I know you feel the economy is bouncing back, but could the 40-50K unresolved foreclosures be resulting in a mixed shift, which essentially takes a disproportionate amount of entry level homes off the market (resulting in more sales of homes in the mid and higher tiers of the market)?

    Just my observation, but there seems to be growing quantity of pre-foreclosure listings in the blue-ribbony towns I’m watching.

  11. Fast Eddie says:

    Just my observation, but there seems to be growing quantity of pre-foreclosure listings in the blue-ribbony towns I’m watching.

    tick… tick… tick… tick…

    They run and they run to catch up to the sun but it’s sinking…. racing around, to come up behind them again!

  12. chicagofinance says:

    Moral of the story……be a shameless fcuking piece of sh!t….waste public resources and lick the ball$ of a scumbag parasite lawyer and you will be rewarded handsomely…….what a message for the youth of America……

    It turns out she didn’t need her parents’ money after all.
    The bratty New Jersey teen who sued her mom and dad for child support and college money is bragging about the hefty scholarship she won from a Massachusetts school.
    Rachel Canning, who dropped the ludicrous lawsuit against her folks last month, revealed the windfall on her Facebook page Sunday, The Star-Ledger reported Tuesday.
    “Decision made,” Canning wrote on March 30. “WNE U class of 2018 BME Major w/ 56,000$ scholarship.”
    Western New England University, the school Canning said she is attending, is located in Springfield, Mass.
    The school’s tuition is about $46,000 per year, including room and board, the paper said.
    This would leave the former Morris Catholic HS student with nearly $10,000 of spending money before she needs to hit up Mom and Pops.

  13. Fast Eddie says:

    “A+” on coming up with a new way to say, “Underwater borrowers will refuse to sell at a price that doesn’t leave them whole.”

    Splendid! And so true. But alas, two paychecks removed and two months of reserves consumed will render them unable to resist and they will succumb.

  14. The Original NJ ExPat says:

    [12] I wonder if they will advance her any of the money before all the good Seaside Heights rentals are gone.

  15. joyce says:

    Man Convicted Of Raping Child Dodges Jail Because He ‘Will Not Fare Well’

    http://www.huffingtonpost.com/2014/03/30/robert-richards-rape_n_5060386.html

    Only read the above story if you’re already having a bad day

  16. joyce says:

    The number of hours you must work at minimum wage to pay for a credit hour at Michigan State University.

    In 1979 it was about 10. Now it’s about 60.

    http://www.theatlantic.com/education/archive/2014/04/the-myth-of-working-your-way-through-college/359735/?google_editors_picks=true

    commentary:
    http://market-ticker.org/akcs-www?post=228899

  17. 1987 Condo says:

    is that $56,000 over 4 years perhaps?
    Not aware of scholarships providing money over what is needed, in other words a negative EFC on FAFSA

  18. Anon E. Moose says:

    Nom [6];

    Mastic? I know it well — fortunately most frequently from about 1,000 ft. above. AKA, Pennsyltucky, NY. Anytime a NY local news story leads off “Suffolk County Police…” odds are the ‘incident’ occurred in Mastic or Shirley. Quite frankly, good on this kid for making it out of there. I wonder if it wasn’t influenced by schools’ geographic balancing aspirations. At a micro level, the ivys can’t be getting many qualified applicants from that district.

  19. The Original NJ ExPat says:

    [16] joyce – Rutgers tuition per semester was about $760 flat rate for as many credits as you dared to take in the late 1970′s. Add in dorm and 19 meals/week meal plan and it was $1300 per semester, $2600 per year all in. I think I broke $100 once for a semester’s worth of books, and I always bought new(mistake, btw). So for $2800 a year you were all set, even for beer, as keg parties were allowed in dorms, (and often sponsored the events), frats were using alcohol and anything else they could think of to lure kids away (which was a hard sell back then, because the dorms were co-ed and they had beer and pot too!). College was a real cheap 4 or 5 year vacation that ended with you getting a job for up to 6 times the salary you could make if you didn’t take the vacation.

  20. Painhrtz - Disobey! says:

    Joyce and how much has the influx of government money had an effect on those costs? Honestly, when you look at a school like Michigan that generates a ton of revenue from it’s athletic program and name those costs seem exorbitant for in-state residents.

  21. 1987 Condo says:

    Just 23 of 228 athletics departments at NCAA Division I public schools generated enough money on their own to cover their expenses in 2012. Of that group, 16 also received some type of subsidy — and 10 of those 16 athletics departments received more subsidy money in 2012 than they did in 2011.

    http://www.usatoday.com/story/sports/college/2013/05/07/ncaa-finances-subsidies/2142443/

  22. A Home Buyer says:

    Question on Pensions for the Financial Wizards on this board:

    Lets hypothetically say I hate New Jersey and want to move out of state, but I am currently 7 years into a job that provides a pension. At 10 years, I am eligible for deferred pension status using the formula “yrs” / 25 x current salary.

    Now consider that I am 35 years out from being eligible for collecting that deferred pension. At 3% inflation (historical norm), assuming the Pension fund still exists, and that the COLA restrictions that NJ enacted until 2044 remain in place… I would probably be only earning around 3K a year in today’s dollars.

    The numbers side of me says its free money, but 3K is like working a minimum wage job for 3 months of a year.

    Would you continue to work in a inner-city school district for 3 more years to earn 3k at retirement years?

  23. Painhrtz - Disobey! says:

    Condo that is even more ridiculous then again public school sports are net losers as well

  24. Comrade Nom Deplume, Guardian of the Realm says:

    [12] chifi

    You couldn’t pay me to go to WNEC (yes, I know it is now a “university” but it will always be WNEC to me).

  25. 1987 Condo says:

    #22..is that formula x/55? x/25 seems pretty rich!

  26. A Home Buyer says:

    Hah… the answer would be clear if that was the case.

    Yes, division by 55. Typo on my part.

  27. Anon E. Moose says:

    HB [22];

    So your options are leave now and get no vesting, or tough out 3 more years for a pittance? Do they give you the option to roll out your vested interest as a lump sum into an IRA or the like? I think if you looked at the dollar value of your buyout option on separation, your decision would be clearer.

    By the same token, if you did gut out three more years, I’d say take the buyout, you’d probably do as well or better than $250/mo. with 35 years to grow. Thing like longevity come into play, too — How long can you expect to collect $3k/yr? Does your family live long? That weighs towards taking the defined benefit option, and makes staying a more attractive proposition.

  28. A Home Buyer says:

    27 –
    Thanks for the heads up on that option, I would not have known to check for that! My research does seem to indicate a buyout option exists however provides no details on determining what amount would be payable.

    The fund in question is the TPAF, but information is sketchy on the withdrawal side. I can only find the form for withdrawing, not mention on what the benefits are.

    Do you have any estimate on what they might expect being returned? Or know where I can continue searching for an answer?

  29. grim says:

    Lets hypothetically say I hate New Jersey and want to move out of state, but I am currently 7 years into a job that provides a pension. At 10 years, I am eligible for deferred pension status using the formula “yrs” / 25 x current salary.

    You missed April 1 – this is of course a trick question. I remember these from math class, tons of extraneous information to lead you down the wrong path.

    The real answer is, what is your opportunity out of state, and how does that play into your long-term career goals? If you are pension eligible in the new position, then the 3 years spent there, assuming it will be for the long haul, will be more valuable. What are you putting on hold, and what is the cost of that?

    Then you’ll get your answer.

  30. JJ says:

    Also folks underwater in Condos and HOAs even if units go above purchase price a lot of them stopped paying maint and Condos/HOAs have slapped liens on the units.

    Add in underwater homes no pun intended in flood zones where rates have shot up into mix and right there you have two groups of sellers who are screwed regardless of how housing performs.

    The performance of housing is heavily dragged up in tristate area by Manhattan and blue ribbon single family homes in train towns and not in flood zones.

    Some sectors of market continue to fall.

    Also property taxes on some properties makes them hard sells and the recent bump up in real estate makes it harder to grieve the taxes, in fact your purchase might be above assessed value causing even higher taxes.

  31. Michael says:

    That’s messed up, you don’t get any of the money they took out if you leave before 10 years? With the turnover rate in teaching in the first 5 years, I don’t know the #, but I know it’s the highest turnover % in any profession. So where does this money go? How is the pension in this much trouble if they rob the employees of their contribution if they dont make the 10 year mark?

    Anon E. Moose says:
    April 2, 2014 at 11:51 am
    HB [22];

    So your options are leave now and get no vesting, or tough out 3 more years for a pittance? Do they give you the option to roll out your vested interest as a lump sum into an IRA or the like? I think if you looked at the dollar value of your buyout option on separation, your decision would be clearer.

  32. chicagofinance says:

    I worked at Kwasha Lipton from 1990-1995, so I spent a good deal of time during the ramping up years of the 401(k) and also the obsolete Cash Balance Plan.

    What you are describing is exactly why most young potential pensioners were tripping over themselves to sign up for the 401(k) option in lieu of the traditional pensions in the late-80′s and early 90′s. In short, pension benefits are back-end loaded and overwhelming benefit long-time workers and punish job hoppers. One of the original reasons for the adoption of 401(k)’s was their greater sense of equity across a workforce and to reduce the employer’s ability to extort a captive employee base.

    That said, revisionist liberal idiots are going to decry all manner a crap about the decisions made 20-25 years ago. Everyone wanted a 401(k) and hated their pensions because they didn’t see the money, didn’t understand it & were stuck in crap situations.

    I agree with Moose….review your options, and sorry the system is rigged against you at this junction in your career…….

    A Home Buyer says:
    April 2, 2014 at 11:17 am
    Question on Pensions for the Financial Wizards on this board:
    Lets hypothetically say I hate New Jersey and want to move out of state, but I am currently 7 years into a job that provides a pension. At 10 years, I am eligible for deferred pension status using the formula “yrs” / 25 x current salary.

    Now consider that I am 35 years out from being eligible for collecting that deferred pension. At 3% inflation (historical norm), assuming the Pension fund still exists, and that the COLA restrictions that NJ enacted until 2044 remain in place… I would probably be only earning around 3K a year in today’s dollars.

    The numbers side of me says its free money, but 3K is like working a minimum wage job for 3 months of a year.

    Would you continue to work in a inner-city school district for 3 more years to earn 3k at retirement years?

  33. 1987 Condo says:

    Not sure what you need, my wife is a teacher as well. Your pension calc is x/55 multiplied by the average of your three highest earning years. that amount is fixed at that nominal amount until you collect. Example, 10 years with last 3 average of $60,000 is $60,000 x 10/55 = $10,909 annually when you collect.

  34. Michael says:

    With so many people in forclosure, not paying their mortgage or their condo/hoa fees, shouldn’t our economy see some kind of uptick in consumer spending resulting from this? Anyone provide any insight on this.

    “Also folks underwater in Condos and HOAs even if units go above purchase price a lot of them stopped paying maint and Condos/HOAs have slapped liens on the units.”

  35. Pete says:

    HB,

    You would get back only what you contributed in to your pension plus 2% interest. Sorry, that does suck.

  36. Street Justice says:
  37. Michael says:

    Great post chi-fi….that was really informative.

    I had no idea people were lining up to get into 401ks. I’m a little younger, and have only been around the headlines stating the love of pensions. I agree with you, I would have been running to get into the 401ks back then so that I have control and ownership of my money. Too many parasites attached to a pension system.

    With all these debates we have had about pensions the past few weeks, I’m left with a feeling of hate towards the pension system. It seems a lot of higher up politicians and people in govt are using the pension system to their advantage at the expense of the regular worker. They really should allow people like Ben to not have to pay into the pension. It’s wrong in so many ways.

    chicagofinance says:
    April 2, 2014 at 12:45 pm
    I worked at Kwasha Lipton from 1990-1995, so I spent a good deal of time during the ramping up years of the 401(k) and also the obsolete Cash Balance Plan.

    What you are describing is exactly why most young potential pensioners were tripping over themselves to sign up for the 401(k) option in lieu of the traditional pensions in the late-80′s and early 90′s. In short, pension benefits are back-end loaded and overwhelming benefit long-time workers and punish job hoppers. One of the original reasons for the adoption of 401(k)’s was their greater sense of equity across a workforce and to reduce the employer’s ability to extort a captive employee base.

    That said, revisionist liberal idiots are going to decry all manner a crap about the decisions made 20-25 years ago. Everyone wanted a 401(k) and hated their pensions because they didn’t see the money, didn’t understand it & were stuck in crap situations.

    I agree with Moose….review your options, and sorry the system is rigged against you at this junction in your career…….

  38. A Home Buyer says:

    All,

    Thanks for the input. This is a very personal decision fraught with many variables, agreed, but its a semi-complex financial one as well with long term implications.

    The pension payouts, even horribly mangled by inflation after 35 years of no COLA, might be a “no brain-er” for a certain reason I haven’t though of yet, and that may only become apparent as we get closer to retirement. I haven’t even broken 30; retirement is no where in my vocabulary at this time (other then saving).

    What I am looking for is a slap upside the head if we are doing something incredibly stupid purely from a financial reason. Running the numbers, I do not see the benefit of staying for such a meager sum. If 3K a year (or 10K assuming no inflation at all over 35 years) becomes vital for our existence, we have failed at retirement savings… horribly.

    As the majority of you outrank me in regards to both wealth and knowledge of its management, I am simply looking for opinions to make sure I am not off my rocker.

  39. A Home Buyer says:

    Condo,

    You are correct that amount is actually around 10K currently, but COLA adjustments were canceled until 2044. As I understand it, inflation will destroy the pension benefit by the time we can collect in 2050. Your wife has the benefit of working until she retires (assuming you stay in NJ) and having your payout based on those numbers. We wouldn’t if we moved and our locked in at our current salary.

  40. njescapee says:

    Report: EPA tested deadly pollutants on humans to push Obama admin’s agenda

    Read more: http://dailycaller.com/2014/04/02/report-epa-tested-deadly-pollutants-on-humans-to-push-obama-admins-agenda/#ixzz2xkgm2a9P

  41. Statler Waldorf says:

    FYI, if vested, your pension is guaranteed by the US Govt:

    http://www.pbgc.gov

  42. Michael says:

    Question, according to the general public, teaching is the best job ever, so why are you leaving? Sorry off-topic, but I’m interested in your answer. You also mention inner city, according to the public, inner city teachers don’t do anything based on their test results and graduation rate. So why would it be a struggle to stay 3 more years at your cake job, where you do nothing all day and get paid big bucks?

    A Home Buyer says:
    April 2, 2014 at 1:43 pm
    Condo,

    You are correct that amount is actually around 10K currently, but COLA adjustments were canceled until 2044. As I understand it, inflation will destroy the pension benefit by the time we can collect in 2050. Your wife has the benefit of working until she retires (assuming you stay in NJ) and having your payout based on those numbers. We wouldn’t if we moved and our locked in at our current salary.

  43. 1987 Condo says:

    #39….given your age, and Christie’s plan to make current employees bear the weight of future pension contributions, I would not consider being a teacher in NJ a wise long term move. Get out asap. My wife has 10 years in and is near 50 so we will stay till she gets 15 years. She also is trying to get an Admin position because those are the only ones that really pay well. Being an effective HS Math teacher with an Actuarial Degree and 2 masters gets her about $58,000 10 years in…but an admin position could lead to a doubling….

  44. The Original NJ ExPat says:

    Extrapolating some YOY sales stats that just came across my desk, I’m calling a top to the Canada Housing bubble.

  45. chicagofinance says:

    If it is not apparent by the pension calc, the way to game the system is to accrue as many pension years as possible for the numerator, then find a way to fatten the “comp” number……lots of local govt people purposely try to get elected to mundane part time jobs (councils/boards/etc.) that accrue pension years. Then they retire from their main careers in the private sector at the normal time. They then try to find a public sector job with a fat salary, which can often be justified based on private sector experience. Presto…..a 20 year styled pension with a six-figure comp number……so a career lawyer or developer can also be pulling a six digit NJ pension at age 62-63….

    A Home Buyer says:
    April 2, 2014 at 1:42 pm
    All, Thanks for the input. This is a very personal decision fraught with many variables, agreed, but its a semi-complex financial one as well with long term implications.

  46. Ragnar says:

    22,
    Short answer, for me, no.

    Looks like that pension is set up to benefit lifers, like most union deals seem to work.
    People overpaid versus their value stay in the union, those underpaid versus their value fly away. The Union is happy with that because the folks left are totally dependent on the union deal, rather than market value, for their incomes.

    Key financial consideration here should be forecasting what income and benefits would come from the job switch relative to the income and benefits foregone. As well as cost of living differentials one state vs another. And inflation. Which is such a difficult forecasting job that’s more of a wild guess than a forecast.

    It looks like a small enough benefit such that it shouldn’t keep you from more promising work for 3 years. If the other work wasn’t so promising, and you are really risk averse, then the inner city school teacher lifer path is probably the safer choice.

  47. Michael says:

    Is this the same job description the public gets? Obviously not, they some how think teachers are millionaires who are way overpaid. They def fell for the Christie con. I see nothing in your passage that leads me to believe teachers are overpaid. I see quite the opposite, I feel like your wife is getting ripped off based on her level of education. No idea what Christie and all his supporters were talking about, when they started attacking teachers in 2010. Def was a political ploy for power that worked beautifully till bridge-gate came along. Just think, people were crowning this crook as the next president….jeez Christie and politicians play the con game well. He had most of the state vote in the last election, with people looking at him as the savior of govt…that’s funny

    “1987 Condo says:
    April 2, 2014 at 2:29 pm
    #39….given your age, and Christie’s plan to make current employees bear the weight of future pension contributions, I would not consider being a teacher in NJ a wise long term move. Get out asap. My wife has 10 years in and is near 50 so we will stay till she gets 15 years. She also is trying to get an Admin position because those are the only ones that really pay well. Being an effective HS Math teacher with an Actuarial Degree and 2 masters gets her about $58,000 10 years in…but an admin position could lead to a doubling….”

  48. Knowned knows of Jerzy Pension says:

    HomeBuyer:

    If you stay the 10 yrs and are vested you can:

    - Keep pension and collect at retirement age or you can cash out and rollover to IRA or new 401k/403b/457. When you rollover you get the employer’s and your contribution.If you are not vested you only get your contributions, so stick to 10 yrs + for vesting.

    -Either way sign up for SACT and max as much as possible (Supplemental Annuity Collective Trust) a (pre-401k ERISA) 401k started by the State of NJ back in the early 60′s, is underused, as nobody knows it exist, is an S&P 500 Fund managed by NJ Treasury Dept and expense free to account holder, and is open to anyone that has participate in any of the State’s Pension Plan. The pre-tax option was phased out, the post taxed (Roth equivalent ) is available. Withdrawal from SACT has to be made at same time as pension. So if you leave in a few years – you get your contributions + earning and rollover into IRA. If you wait to retire decades from now then you collect the contributions + earnings then.

  49. clotluva says:

    All you pensioners in potentially insolvent private sector plans beware…a six figure pension can be cut in half pretty easily.

    Q: How can an employer terminate a pension plan?

    A: There are two ways an employer can terminate its pension plan.

    Standard Termination

    The employer can end the plan in a standard termination but only after showing PBGC that the plan has enough money to pay all benefits owed to participants. Your plan must either:

    purchase an annuity from an insurance company (which will provide you with lifetime benefits when you retire) or,

    if your plan allows, issue a lump-sum payment that covers your entire benefit. Before purchasing your annuity, your plan administrator must give you an advance notice that identifies the insurance company (or companies) that your employer may select to provide the annuity. PBGC’s guarantee ends when your employer purchases your annuity or gives you the lump-sum payment.

    Distress Termination

    If the plan does not have enough money to pay all pension benefits owed to participants and the employer is in finanacial distress, the employer may apply for a distress termination. PBGC cannot grant the application, however, unless the employer proves to us or to a bankruptcy court that the employer cannot remain in business unless the plan is terminated. If the application is granted, we normally will take over as trustee of the plan and pay plan benefits, up to the legal limits.

    Q: What is the maximum amount that PBGC can guarantee by law?

    A: PBGC’s maximum benefit guarantee is set each year under provisions of ERISA. The maximum guarantee applicable to a plan is fixed as of that plan’s termination date except for cases where termination occurs during a plan sponsor’s bankruptcy, in which case the maximum guarantee may be fixed as of the date the sponsor entered bankruptcy. An earlier date also may apply to certain airline industry plans.

    For 2013, the maximum guaranteed amount is $4,789.77 per month ($57,477.24 per year) for workers who begin receiving payments from PBGC at age 65. The maximum guarantee is lower if you begin receiving payments from PBGC before age 65 or if your pension includes benefits for a surviving spouse or other beneficiary. The maximum guarantee is higher if you are over age 65 when you begin receiving benefits from PBGC.

    http://www.pbgc.gov/about/faq/pg/general-faqs-about-pbgc.html

  50. 1987 Condo says:

    Research what has happened to Bethlehem Steel Pensioners…..brutal

  51. pete says:

    #48,

    How much is the employer’s contribution in that scenario?

  52. Anon E. Moose says:

    Re: [49];

    Lots of airline pilots (forced to retire at age 60 by fed regs) got burned hard by airlines that washed themselves clean of their pension obligations and are still flying on the other side of a BK or two.

    Funny story about that — some pensions had provision to pay out a spouse’s interest as a present-value lump sum in case of divorce. So the pilots and their spouses just got ‘divorced’ on paper to collect half the pension value and reduce their risk exposure. The pilots were accused of fraud, but I don’t know if the airlines could make that stick.

  53. Anon E. Moose says:

    Con’t [52];

    Looks like the pilots won: http://dfw.cbslocal.com/2011/07/20/continental-airlines-pilots-win-sham-divorce-case/

    Even more, it wasn’t just a split, they seem to have gotten it all because the pilot would assign the entire pension to the spouse as part of the divorce.

  54. chicagofinance says:

    ragnar: for you…

    Opinion
    High-Frequency Hyperbole
    Beware of critics who are ‘talking their book’ about trading that lowers costs.

    By Clifford S. Asness And Michael Mendelson

    A few nights ago, CBS’s “60 Minutes” provided a forum for author Michael Lewis to announce that Wall Street is “rigged” and for the sponsors of a new trading venue called IEX to promise to unrig it. The focus of the TV segment was high-frequency trading, or HFT, an innovation now over 20 years old.

    The stock market isn’t rigged and IEX hasn’t yet generated a lot of interest. In our profession, what we saw on “60 Minutes” is called “talking your book”—in Mr. Lewis’s case, literally.

    The onslaught against high-frequency trading seems to have started about five years ago when a blogger made a wildly exaggerated claim about one firm’s HFT profits. Nowadays after any notable market event, and again last Sunday for no reason other than a book launch, the world gets bombarded with arcane details and hyperbolic assertions about HFT strategies. If you find the discussion overwhelming, we have some good news: The debate can be understood without knowing how equity orders are routed, matched or canceled.

    Few professionals completely understand the details of market microstructure. Rather, when someone has a strong opinion about the subject, it’s likely to be what they want you to believe, not what they know.

    Our firm, AQR Capital Management, is an institutional investor, primarily managing long-term investment strategies. We do not engage in high-frequency trading strategies. Here is where our interest lies: What is good for us is lower trading costs because it translates into better investment performance and happier clients, which makes our business slightly more valuable.

    How do we feel about high-frequency trading? We think it helps us. It seems to have reduced our costs and may enable us to manage more investment dollars. We can’t be 100% sure. Maybe something other than HFT is responsible for the reduction in costs we’ve seen since HFT has risen to prominence, like maybe even our own efforts to improve. But we devote a lot of effort to understanding our trading costs, and our opinion, derived through quantitative and qualitative analysis, is that on the whole high-frequency traders have lowered costs.

    Much of what HFTs do is “make markets”—that is, be willing to buy or sell stock anytime for the cost of a fraction of the bid-offer spread. They make money selling at the offer and buying at the bid more often than they have to do it the other way around. That is, they do it the same way that market makers have done it since they were making markets in Pompeii before Mount Vesuvius halted trading one day. High-frequency traders tend to do it best because their computers are much cheaper than expensive Wall Street traders, and competition forces them to pass most of the savings on to us investors. That also explains why many old-school Wall Street traders hate them.

    One of the biggest headline-grabbing worries about HFTs is how fast the trades are conducted. The speed sounds unnecessary, dangerous and possibly nefarious—”These guys care about the speed of light!” For the most part, though, HFTs don’t need that super speed to get ahead of the little guy or even institutional traders, but to get ahead of other HFTs. Some of the loudest complaints about high-frequency trading come from the slower traders who used to win the races.

    While we like HFTs on balance for reducing our clients’ trading costs, some may push the envelope at times. Some of them may negotiate advantages that might be bad for markets. Worse, these arrangements tend to be little understood by the broader range of market participants. A little more transparency would be good here, and the market venues that have been offering these deals have been moving in that direction. They should move faster.

    But these concerns are occupying too much attention. The biggest concern we have with modern markets is their complexity and the associated operational risks. The market structure that enables the HFTs and provides us with their benefits may also be one that risks technological calamity.

    The good news has been that regulators began to focus on this potential problem last year. Unfortunately, the recent fusillade of hyperbole about HFT practices threatens to derail this effort and refocus attention where the problem isn’t. Real work is necessary to improve and safeguard a complex and still reasonably new system. We shouldn’t get ourselves dragged into a hyped-up war over a matter that doesn’t affect investors very much—and where, to the degree that it does, we’d argue that the effect is easily a net positive.

    So why are so many people so loudly certain about the problems of high-frequency trading? Again, look to interests. Making mountains out of molehills sells more books than a study of molehills. But some traditional asset managers are also HFT critics. These managers are institutional investors like us but with different investment strategies and trading methods.

    Rather than embracing electronic markets, these managers have stuck with their old methods. They think HFT costs them money. Often when they try to trade large orders quickly, they find the trades more difficult to execute in a market that has gravitated toward more frequent trades in smaller sizes, and that the price moves away from them faster now.

    We doubt that these old-school managers were truly better off in the pre-HFT world, but it’s hard to prove either way. And if they’re right, it may be only because HFTs have made the markets more efficient, eliminating some of the managers’ edge.

    Well, sorry, but prices responding quickly—and traders not being able to buy or sell a ton without the market moving—is what is supposed to happen in a well-functioning market. It happens to us too. It may be that in the old days these managers were able to take advantage of whomever was on the other side of their trade, and that nowadays they find it far more difficult to gain that advantage. A more efficient market shouldn’t be mistaken for an unfair one.

    These big, traditional investment managers represent a business opportunity to anyone who can offer them new market venues, like IEX, that might conceivably avoid the perceived ill effects of high-frequency trading. We wish them well in that effort, and if they succeed these new exchanges and their clients will benefit. But let’s allow the issue to be decided by open competition, not by politics, demagoguery and rules born of crony capitalism.

    Our bet is that high-frequency trading comes out on top as it offers more investors better execution. But we have zero problem being proven wrong by the marketplace.

    How HFT has changed the allocation of the pie between various market professionals is hard to say. But there has been one unambiguous winner, the retail investors who trade for themselves. Their small orders are a perfect match for today’s narrow bid-offer spread, small average-trade-size market. For the first time in history, Main Street might have it rigged against Wall Street.

    Mr. Asness is managing and founding principal of AQR Capital Management, where Mr. Mendelson is a principal and portfolio manager. Aaron Brown, chief risk officer at the firm, also contributed to this op-ed.

  55. A Home Buyer says:

    Thanks for the information everyone.

    For the record, I am not the person in question (my spouse is, not that it matters for my hypothetical question). The plan would be to take a teaching position in a southern state. We would expect a cut in both salaries and benefits for the new position, but New Jersey is just becoming to much to handle. Quality of life versus income, I guess.

    I will recommend my spouse stick it out until the 10 years, but we are both just wanting to get out. Time will tell.

    Michael;

    I would provide an answer for you, except you really don’t care do you? The sarcasm seething from your post, waiting for a response so you can tout your political ideologies using what ever I write as ammunition… not going to be apart of it. Teachers are abused by the administrators / state and scapegoated by the citizenry; but your demeanor and attitude will not win any hearts or minds for any side.

  56. Ragnar says:

    Thanks Chifi,
    Maybe Mike, anon, and cobbler can try to re-educate Asness.

  57. clotluva says:

    re. 52 and 53

    Nice. I just think it’s interesting that a company doesn’t even actually have to file for bankruptcy to rid itself of the pension liability. Heck of a way to fix your balance sheet.

  58. Michael says:

    Ragner,chi-fi- My problem with your article comes down to this.

    “Some of the loudest complaints about high-frequency trading come from the slower traders who used to win the races.”

    This guy is defending hft as not being rigged but admits that there was always a race involved. I think the problem at the heart of this matter is that people want a market that is fair and honest. Hft shows this is not the case. So how do financial market players justify allowing people to take advantage of another based on speed, they justify it by saying it costs less to trade. Oh it’s ok then. I see, it’s helping everyone, esp the avg investor. That line is almost laughable. This guy is trying to sell people on the idea that hft has given the avg joe a rigged advantage. Wow, that’s laughable. This guy is talking out of his a$$.

    “For the first time in history, Main Street might have it rigged against Wall Street.”

    So the market is not rigged, but then it is, and main st is doing the rigging?

  59. Alan says:

    The matter of fact is that home prices were in decline for the pass several months. The mortgage rate is 1% higher than a year back. I have been monitoring a few houses in Somerset county since the beginning of this year, all of them are still in the market, and sellers are keeping reducing prices. Open house every other weeks, didn’t sell. Does this tell you something regarding the true state of NJ housing market?

  60. Michael says:

    This is a great comment. Hate to say it, but he has a point. In trying to prevent suffering, I’m am throwing away progress. Throwing away progress leads to total suffering. Better off with some suffering as opposed to all suffering.

    “Progressives detest people like the author, because he embraces liberty and its attendant personal responsibility. Embracing a life predicated upon those elements entails risk, and liberal progressives hate risk. Their siren song is to build a welfare state that eliminates risk and promises that none will ever suffer any kind of deprivation or failure. This leads to safety, but not real progress.

    “Only those who play win. Only those who risk win. History favors risk-takers, and forgets the timid. Everything else is commentary.””
    Iveta Cherneva

    http://online.wsj.com/news/articles/SB10001424052702303978304579475860515021286

  61. Cronut Nom Deplume says:

    [53] moose,

    I remember Continental well. It sent a few shivers through the industry. But IRS has taken the position that there largely isn’t such a thing as a sham divorce. If a state certifies it, it’s legal even if the purpose was tax avoidance. IRS has even ruled that cohabiting former spouses are divorced and won’t question it.

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